Earlier this year, the Milwaukee Common Council rezoned a former south side factory to allow its conversion into apartments, overruling opposition from nearby manufacturers who said the building's residents would be a poor fit for the area.

Three months later, another neighborhood building owner wants to rezone his property to allow for a school and other nonindustrial uses. But, for now, the response from his neighbors has been much quieter.

The Plan Commission last week unanimously recommended rezoning Jim Dieter's 60,000-square-foot building at 1236 W. Pierce St. Dieter wants to lease 12,000 square feet to the Academy of Excellence, a new Milwaukee Parental Choice Program school.

His past efforts to obtain zoning variances to allow schools at the building have at times brought opposition from nearby businesses. The rezoning would eliminate the need to obtain those temporary variances.

The continued redevelopment of former industrial buildings into housing, offices, retail space and other uses is needed to bring new investment into Milwaukee's older neighborhoods, Dieter said.

"It's good for this building to have that zoning; otherwise it's a dead building," said Dieter, who's already restored large portions of the building for his business, Black hawk Antique Market, and another antique store, Pierce Regal.

"For the city of Milwaukee to move forward, city planning has to really consider people who apply for mixed use," he said.

The Department of City Development and Common Council have supported some of those efforts.

In January, the council accepted the department's recommendation to rezone the former Milwaukee Paper Box Co. building, at 1560 W. Pierce St., which would allow Minneapolis-based developer Sherman Associates Inc. to convert the building into 72 apartments.

Nearby manufacturers oppose converting the six-story building, now used for storage. They say the building's residents would clash with their businesses over heavy truck traffic, noise and odors - possibly forcing the companies to move out.

Sherman executives and other development supporters say traffic from residents would have little impact on the manufacturers. The apartments would include 72 off-street parking spaces, and the building would be located on bus lines. The apartments also would be designed to reduce noise from the outside.

Sherman recently learned that the firm didn't receive federal affordable housing tax credits to help finance the project. But Sherman can seek the credits again in 2013.

Extensive renovations

Dieter supports the apartment proposal. He says the former box factory, like his three-story building, is obsolete for industrial use.

Dieter bought the property in 1999 for $225,000 - a steal compared to prices being paid then for outdated former manufacturing buildings in the condo-crazy Historic Third Ward. Blackhawk opened five years later, after Dieter repaired the roof, poured new concrete floors, added bathrooms and made other improvements.

He recalled how the building was completely dark, with boarded-up windows and no power, when he first began the restoration.

"I went in there with a flashlight," he said.

After opening up the windows and getting a better look at the building's condition, Dieter questioned whether he had made the right decision.

"I'm actually kind of a crazy person," said Dieter, who lives in a restored German Baroque-style mansion, built in 1896 on Milwaukee's west side. "I'm a historical buff."

In 2009, Dieter spent about $300,000 to convert some of the Pierce St. building into classrooms for a Choice school, Outlook University Independent School Network.

With Outlook signing a three-year lease, the rent would pay for the improvements, including a new elevator, and help attract other tenants, said the building's leasing agent, Paul Galbraith, of Apex Commercial Inc.

But after just a few months, Outlook left the building for the Shops of Grand Avenue, where it leased space on the Plankinton Arcade's lower level for less than what Dieter was charging. That left Dieter with bills owed to his architect and contractors that he's just now paying off.

"We got snookered," said Dieter, who said his creditors have been "very patient."

In response, Outlook founder Willie Killins said Dieter is unfairly blaming the school. Killins said Dieter began making improvements to the building before Outlook signed a lease.

Once Outlook began operating, it fell short of the number of students it hoped to enroll, which reduced the school's revenue, Killins said. He asked Dieter to reduce the school's rent.

"He was not willing to do that," Killins said. So the school moved out.

Outlook closed after the 2009-'10 school year, and Killins later filed for Chapter 7 bankruptcy. Killins claimed assets of $500 and liabilities of $527,624, including $460,000 owed to the Michael, Best & Friedrich law firm and $37,309 owed to the Grand Avenue.

Businesses object

In 2010, the city Board of Zoning Appeals granted a variance for another Choice school, Whole Village Institute, over objections from two nearby businesses: commercial produce processor Garden-Fresh Foods Inc. and Vulcan GMS Inc., a lead parts manufacturer.

Those companies raised objections similar to those made about the apartment proposal at the former box factory, and later appealed the board's decision. In June 2011, Milwaukee County Circuit Judge William Pocan ruled that the zoning board had failed to properly explain its reasons for granting the variance.

Whole Village later that year left the building. Dieter's investors group that owns the building has since sued Whole Village, claiming it failed to pay rent after staying in the building once its lease expired. Whole Village denies that claim, according to its response filed in Milwaukee County Circuit Court.

Meanwhile, Academy of Excellence had surfaced as a prospective tenant. The zoning board in August denied a variance for the school after nearby businesses again objected.

But the academy's second request for a variance, filed in December, isn't being opposed by Garden-Fresh, according to a letter to the zoning board from the company's attorney, Nicholas DiUlio.

DiUlio's letter said company managers met with Dieter and academy officials, and approve of the school's plan to handle traffic from students being dropped off and picked up.

However, Vulcan remains opposed to a school locating at Dieter's building, said Chief Financial Officer Dan Henkhaus.

If the building is rezoned, and Academy of Excellence begins operations this fall, Dieter hopes to land other tenants. He notes that his building's redevelopment hasn't received any public financing, and says Blackhawk Antique Market, if not profitable, has been paying its bills despite the recession and slow recovery.

"We putz at it," Dieter said. "But we're still here."

What's next

The Common Council's Zoning, Neighborhoods and Development Committee is to consider the rezoning for the 1236 W. Pierce St. building at its May 15 meeting.